People have been urged not to enter the water for recreational activities such as swimming, or use for domestic uses like showering.

Water NSW has placed a green alert on the Severn River below the storage indicating that water to be safe for stock and domestic use.

If blue-green algae becomes visible below the storage, water should be sourced from alternative supplies.

Water NSW outlined in a statement, the species of blue-green algae identified are potentially toxic and may cause gastroenteritis in humans if consumed and skin and eye irritations after contact.

Boiling the water does not remove algal toxins.

"People are advised not to enter the water, not to drink untreated water or bathe in water drawn from the dam while this red alert level warning is in place. Town water supplies remain unaffected and safe to drink.

"Contact with the water may also pose a threat to livestock and pets. Livestock owners are reminded to continue to check stock water supplies for blue-green algae and to remove stock from foreshores."

Blue-green algae usually appear as green paint-like scums on the water, near the edges, or as greenish clumps throughout the water. It makes the water appear dirty, green or discoloured and generally has a strong musty or earthy odour.

People who believe they may have been affected by blue-green algae are advised to seek medical advice.

Information updates about blue-green algae blooms and red level warning areas can be obtained from the Regional Algal Coordinating Committee, free-call Algal Information Hotline on 1800 999 457 or visit - http://www.waternsw.com.au/water-quality/algae.